Happy Flag Day! 14 States Exempt Flags from Their Sales Taxes
June 14, 2010
Today is Flag Day, the anniversary of when 19-year-old Wisconsin teacher Bernard J. Cigrand asked his students to write essays on the U.S. flag and its significance. This fell on the anniversary of the Continental Congress’s vote in 1777 to adopt the Stars and Stripes, and since 1949, Flag Day has been honored every June 14.
To accompany today’s theme, we note that 14 states exempt the purchase of U.S. or their state’s flags from their sales tax. Such an exemption is poor tax policy: states have exempted nearly 60% of consumer sales from sales tax (more than half), often for political reasons. At the same time, many business inputs are subject to tax, meaning that some retail items are taxed multiple times and some (like flags in 14 states) not at all. This micromanagement of consumer decisions disrupts what would otherwise be decisions made on economic factors, not tax incentives or government prodding.
Take West Virginia, for instance. Their exemption for flags is the 49th item in a lengthy list of exemptions. In Vermont, it’s merely the 33rd, but they throw in the wrinkle that it’s only exempt if sold to (or by) a veteran’s organization. Another reminder to keep by the register of Vermont flag vendors.
Here’s the full list:
States That Exempt U.S. and State Flags From Sales Tax
|California||If sold by a nonprofit veterans organization||Cal. Rev. & T. Code § 6359.3|
|Connecticut||Exempt||Conn. Gen. Stat. § 12-412(23)|
|Florida||Exempt||Fla. Stat. § 212.08(7)(f)|
|Maryland||Exempt||Md. Code, Tax General § 11-205|
|Massachusetts||Exempt||Mass. Gen. Laws ch. 64H § 6(w)|
|New Jersey||Exempt||N.J. Stat. 54:32B-8.26|
|New York||Exempt||N.Y. Tax Law § 1115(a)(11)|
|Pennsylvania||Exempt||72 Pa. Stat. § 7204(32)|
|Rhode Island||Exempt||R.I. Gen. Laws § 44-18-30(34)|
|Tennessee||If sold by a nonprofit organization||Tenn. Code § 67-6-329|
|Vermont||If sold by or to tax-exempt veterans’ organization||Vt. Stat. tit. 32, § 9741(33)|
|Virginia||If sold by government agency||Va. Code § 58.1-609.1|
|West Virginia||Exempt||W. Va. Code § 11-15-9(a)(49)|
|Wisconsin||Exempt||Wis. Stat. § 77.54(46)|
Source: Tax Foundation
Happy Flag Day!
Was this page helpful to you?
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?Contribute to the Tax Foundation
Let us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?Give Us Feedback